A Generalized Fluid Model of Ride-Hailing Systems

27 Pages Posted: 12 Feb 2021 Last revised: 24 May 2021

See all articles by Zhengtian Xu

Zhengtian Xu

George Washington University - Department of Civil and Environmental Engineering

Yafeng Yin

University of Michigan, Ann Arbor

Xiuli Chao

University of Michigan at Ann Arbor - Department of Industrial and Operations Engineering

Hongtu Zhu

University of Texas at Houston - MD Anderson Cancer Center

Jieping Ye

DiDi Labs - DiDi Research Institute

Date Written: July 6, 2020

Abstract

This paper proposes a macroscopic fluid modeling framework to assist with strategic decision making of a platform for operating a large-scale on-demand app-based ride-hailing system. The framework captures the spatiotemporal characteristics of a ride-hailing system, and is flexible in representing control policies that a platform is implementing. It thus enables the analysis of a large-scale ride-hailing system with observable market responses and facilitates the optimization of the control polices. As a demonstration of the proposed framework, we customize it for a ride-hailing system operated by Didi Chuxing in a large city of China, and conduct an empirical study of the system. In doing so, we calibrate the model with a high degree of granularity using empirical data, and then investigate optimal pricing strategies to achieve various managerial objectives of the platform. To our best knowledge, the proposed model is the first of its kind that offers a tractable way to support the analysis and optimization of large-scale ride-hailing systems. The empirical study also provides one of the first testbeds for examining various operations strategies for ride-hailing services.

Keywords: Ride-hailing, fluid model, spatiotemporal characteristics, optimal pricing

Suggested Citation

Xu, Zhengtian and Yin, Yafeng and Chao, Xiuli and Zhu, Hongtu and Ye, Jieping, A Generalized Fluid Model of Ride-Hailing Systems (July 6, 2020). Available at SSRN: https://ssrn.com/abstract=3743112 or http://dx.doi.org/10.2139/ssrn.3743112

Zhengtian Xu (Contact Author)

George Washington University - Department of Civil and Environmental Engineering ( email )

800 22nd Street NW
Washington, DC 200052
United States

Yafeng Yin

University of Michigan, Ann Arbor ( email )

2350
Hayward Street
Ann Arbor, MI 48109
United States

Xiuli Chao

University of Michigan at Ann Arbor - Department of Industrial and Operations Engineering ( email )

1205 Beal Avenue
Ann Arbor, MI 48109
United States

Hongtu Zhu

University of Texas at Houston - MD Anderson Cancer Center

1901 East Road, Unit 1950
Houston, TX 77030
United States

Jieping Ye

DiDi Labs - DiDi Research Institute ( email )

Beijing, Haidian District 100085
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
83
Abstract Views
327
rank
397,017
PlumX Metrics